Sobeys' New Warehouse ‘Major Leap Forward’: Analyst

An automated warehouse capable of moving three times the product of a traditional grocery warehouse while using just one-third of the labor is now fully operational and serving Sobeys stores in Ontario, the company said.

STELLARTON, Nova Scotia — An automated warehouse capable of moving three times the product of a traditional grocery warehouse while using just one-third of the labor is now fully operational and serving Sobeys stores in Ontario, the company said.

The warehouse, located in Vaughn, Ontario, represents a “major leap forward in efficiency and productivity,” according to Perry Caicco, an analyst with CIBC Capital Markets, Toronto.

Sobeys, based here, intends to use the 500,000-square-foot store to serve its 340 stores in Ontario while replacing current facilities in Whitby and Milton, reports said. Those centers will be retrofitted to handle perishable goods distribution.

In a research note, Caicco said the Vaughn facility can process 1.4 million cases a week with 140 employees — representing a major opportunity to reduce supply chain costs and improve efficiency. “As the savings accrue and the accuracy improves over the next couple of years, the company should be able to reinvest in price and service and/or deliver more earnings,” he said.